Westland College Has a Telephone System That Is in Poor

question 129

Multiple Choice

Westland College has a telephone system that is in poor condition. The system either can be overhauled or replaced with a new system. The following data have been gathered concerning these two alternatives:



Westland College uses a 10% discount rate and the total - cost approach to capital budgeting analysis. Both alternatives are expected to have a useful life of eight years. (Ignore income taxes in this problem.)
-What is the net present value of the alternative of overhauling the present system?

• A) ($1,279,316).
• B) ($1,194,036).
• C) ($1,119,316).
• D) $801,284.

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Definitions:

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